Analysis of Financial Results

June 2016

2

Table of Contents

Business Strategy

Financial Performance

Annexure

Company Overview

3

Time tested Bank with 92 years of banking history 1.

Pan-India footprint2.

Robust technology and risk management systems3.

Strong productivity, capital adequacy ratios4.

Experienced management team & Professional Board5.

Company Overview

Highest Standard of Corporate Governance6.

Business Process Reengineering under implementation7.

Consistent track record of profit since inception8.

Powered by KBL - VISION 20209.

4

• Incorporated in 1924, Karnataka

Bank is one of the oldest time

tested private sector Banks

• Offers wide variety of corporate

and retail banking products and

services to over 7.5 million

customers

• Forayed into General Insurance

business as a JV partner in

Universal Sompo General

Insurance Company Limited

• 2,033 service outlets with 733

branches, 3 Extension Counters

and 1,297 ATMs in 484 centres

across India as on June 30, 2016

• Business Turnover of ` 86,447

crore as at 30.06.2016.

1995

1977

1960 to

1966

• Took over assets and liabilities of Sringeri Sharada Bank Ltd, Chitaldurg Bank & Bank of Karnataka, Hubli.

• Became an authorised dealer of foreign exchange

• Public issue of 45 lakh equity shares in October 1995

2000 • Implementation of “Finacle” CBS

2002 • Bancassurance tie-up with MetLife• Maiden bonus issue in the ratio of 1:1

2005 • Completed 2:1 rights issue to raise ` 160 crs

2006

• Floated general insurance JV along with Allahabad Bank, Indian Overseas Bank, Dabur Investments and Sompo Japan Insurance

• Launched CDSL-DP services at select branches

1924 • Incorporated on 18th February 1924 at Mangalore by Late B R Vyasarayachar & other leading members of the South Kanara Region

2003 • Right issue in the ratio of 1:2

2007 • Completion of 100% core banking

2009 • Compliance with Basel-II norms

2010 • Maiden QIP aggregate ` 160.83 crs.

2012

• BPR implementation under the guidance of M/s KPMG Advisory Services Pvt Ltd. commenced

• Business Turnover crossed the milestone of ` 50,000 crore• No. of branches crossed 500• Average turnover per branch crossed ` 100 crore• Launched ASBA facility

2011 • Right issue of ` 457.03 crore in the ratio of 2:5.• Launched Online Trading facility

History & Evolution

2013 • Secured ISO 27001 : 2005 Certificate from NQA

• Business turnover crossed the milestone of ` 75,000 crore2014

• Unveiled KBL – VISION 2020 & adopted Vision Statement• No. of ATMs crossed 1,000

2015

Awards & accolades received during the FY 2016-17 :

Bank has bagged „Award of Excellence‟ for “Outstanding Performance in MSME funding”

instituted by Federation of Industry, Trade & Services [FITS]

Bank has bagged STP Award in recognition of its improved payment formatting & Straight-

Through Rate for the year 2015-16 by The Bank of New York Mellon.

Bank has bagged „CFBP Jamnalal Bajaj Uchit Vyavahar Puraskar – 2015‟ “Certificate of

Merit” under the category „Service Enterprises – Large‟ for Fair Business Practices.

Bank has bagged „Greentech Safety Award 2016‟ instituted by M/s Greentech Foundation,

New Delhi, under „Gold‟ category in Banking sector, for its safety & security measures at

Head Office.

Bank has bagged "Certificate of Special Mention for use of Technology for Financial

Inclusion” among Small Banks, instituted by IDRBT.

5

Awards & Accolades

Awards & Accolades – contd..

Shri P Jayarama Bhat, MD & CEO of the Bankand Shri Raghavendra Bhat M, GeneralManager, receiving the "Certificate of SpecialMention for use of Technology for FinancialInclusion” among Small Banks, instituted by

IDRBT, from Dr. Raghuram G. Rajan,Governor, Reserve Bank of India, in a functionheld at Hyderabad on 18-07-2016.

Shri Mahabaleshwara M S, Chief GeneralManager of the Bank, receiving theCertificate of Merit under the category“Service Enterprises – Large” in the 28th

CFBP Jamnalal Bajaj Awards 2015 for FairBusiness Practices, from Shri AjayPiramal, Chairman, Piramal Group, in a

function held at Mumbai on 14-06-2016 .

7

Pan-India footprintPan-India Presence

Total 2,033 outlets –733 branches, 3 Extension Counters

& 1,297 ATMs

Total 27 e-Lobbies & 25 mini e-Lobbies

Specialized branches for Forex, Industrial, Agriculture,

MSME, Corporate business & Financial Inclusion

93 Financial Inclusion branches, 37 Ultra Small branches

Expanding network in northern India also.

25

21

2

4

21

7

7

9

3

457

17

7

43

8

1

5

6

49

11

5

18

Has the strongest presence in South India with 574 branches

No of branches & ATMs

Area wise distribution of branches (Jun „16)

682 725 733

1,036

1,275 1,297

Jun'15 Mar'16 Jun '16

Branches ATMs

Metro

25%

Urban

29%

Semi

Urban

24%

Rural

22%

Top 5 States:Karnataka (457), Tamilnadu (49), Maharashtra (43), Andhra Pradesh (32), Delhi (21)

1718

32

8

Robust technology platform and risk management systems

Strong technology platform

Pioneer in implementing “Finacle” (CBS) amongst the old generation private sector banks

State-of-art IT set up which has enabled Anytime Anywhere Banking through alternate delivery

channels such as ATMs, VISA International Debit Card, RUPAY Debit Card, Internet Banking,

Mobile Banking, IMPS, e-lobby etc.

Enabled Online Account Opening, implemented „M-Passbook‟ (Mobile Passbook), „KBL Apna

App‟ (SMS Banking) etc as additional facilities for the convenience of customers.

Also offers other products such as NGRTGS, NEFT, NECS, CTS, Online Trading, ASBA facility,

Gift Card, Travel Card, Biometric Smart Card under Financial Inclusion, PoS Network, Online

inward remittance facility to NRIs etc.

Implemented Lending Automation Processing System (LAPS) software for efficient life cycle

management of loan accounts and improved monitoring.

Implemented an Enterprise Level Fraud Risk Management System (ELFRMS) for effective cyber

fraud prevention across delivery channels.

The existing “ISO 27001:2013” certificate encompassing the Information Security Management System

(ISMS) at the Bank‟s Data Centre, Near line Site [NLS] at Bengaluru and Information Technology

Department including the DR site [IT & DR] at Head Office, Mangaluru, has been renewed by AJA

Registrars, UK, for a further period of three years up to March 2019, reflecting the Bank‟s continued

commitment to technology adoption.

9

Robust technology platform and risk management systems

Effective risk management system

Integrated Risk Management Committee develops policies and strategies for integrated

risk management, monitors and reviews risk profile of the bank periodically.

Internal Credit Rating of all the borrowers: Credit exposure above INR 25 lakh are rated

borrower-wise and credit facilities below INR 25 lakh & all schematic advances including

agri-credit proposals are rated under „Pool based approach‟.

Continuous offsite surveillance of borrower accounts.

Effective ALM/mid office set up to monitor Liquidity risk/ Market risk on a continuous

basis.

For effective Operational risk management:

o Bank is building up a database of internal Loss data, near- miss cases and other

Operational risk events, since Sept 2007.

o Bank has an effective AML monitoring system to scrutinize the customer transactions to

ensure compliance to the extant guidelines.

Bank has taken all necessary steps for migration to „Basel II advanced approaches‟ under

Credit, Market and Operational Risk and also complied with the extant „Basel III‟

guidelines of RBI.

Bank has implemented a scientific Fund Transfer Pricing (FTP) & Customer Profitability

Management System (CPMS) to assess the performance of branches / products /

portfolios / customers.

10

Return and Capital Adequacy Ratios

12.70% 11.73%12.96%

0.0%

5.0%

10.0%

15.0%

20.0%

Jun'15 Mar '16 Jun '16

Return on Equity (%) (after tax) Return on Assets (%) (after tax)

0.84% 0.76%0.85%

0.0%

0.5%

1.0%

1.5%

Jun'15 Mar '16 Jun '16

Capital Adequacy (%) - Basel III

10.2710.5610.28

1.381.471.79

12.0312.07 11.64

0

4

8

12

Jun'15 Mar '16 Jun '16

Tier I Tier II

11

Productivity ratios

Operating Profit per employee (` lakh) * Operating Profit per branch (` lakh) *

140.2117.9

142.9

0

50

100

150

Jun'15 Mar '16 Jun '16

Business per employee (` crs)

10.2 10.8 11.1

0

4

8

12

Jun '15 Mar '16 Jun '16

Business per branch (` crs)

114.5 116.4117.9

0

20

40

60

80

100

120

Jun '15 Mar '16 Jun '16

12.511.0

13.5

0

3

6

9

12

15

Jun '15 Mar '16 Jun '16

* annualised

12

Financial Performance

13

Income & Profit

Net Income (` crs)

239

855

262

109

415

122

0

250

500

750

1,000

Jun '15 Mar '16 Jun '16

Operating profit Net profit

Operating and Net Profit (` crs)

Net Interest Margins (%)

2.55%2.40%2.55%

0%

1%

2%

3%

Jun '15 Mar '16 Jun '16

Cost to Income Ratio (%)

51.41%53.68%46.94%

0%

25%

50%

75%

Jun '15 Mar '16 Jun '16

365

1303

331

174

543

119

1846

450 539

0

500

1,000

1,500

Jun '15 Mar '16 Jun '16

Other IncomeNet Interest Income

(3 months) (3 months)(12 months) (3 months) (3 months)(12 months)

13,50413,26111,693

37,84137,07334,911

156154

163

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Jun '15 Mar '16 Jun '16

CASA Retail Purchase liability

14

Deposits

Deposits (` crs)

Savings Bank

19.90%

Current Account6.32%

Purchase liability0.30%

Retail Term

Deposits73.48%

Deposits break up (Jun „16)

46,767

51,50150,488

25.00% 26.26% 26.22%

0%

10%

20%

30%

Jun '15 Mar '16 Jun '16

CASA share to total Deposits

15

Deposits

NRI Deposits (` crs)

NRI

deposits

6.15%

Domestic

deposits

93.85%

2,6573,045 3,165

5.68%6.03% 6.15%

0

1,000

2,000

3,000

Jun '15 Mar '16 Jun '16

0%

2%

4%

6%

8%

10%

Amount %

*

7.67% 7.51%6.95%

4%

6%

8%

Jun '15 Mar '16 Jun '16

Cost of Deposits

16

Advances (` crs)

33,90231,352

34,946

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Jun '15 Mar '16 Jun '16

Advances

RatingNo of

BorrowersBalance O/s

(in crs)

% to GBC

AAA 7 1,042.35 2.94%

AA 17 1,238.93 3.50%

A 16 893.23 2.52%

BBB 13 621.01 1.75%

BB 14 536.08 1.51%

B 7 313.06 0.88%

C - - -

D 8 828.15 2.34%

Total 82 5,472.81 15.45%

Gross Bank Credit 35,411.86

External rating wise Credit Portfolio as of June „16

17

Advances

Segmentation of Advances (Jun „16)

Medium

Ent.

3.90%

Other

Personal

loans

5.80%Large Ent.

14.58%Housing

12.50%

Agricultur

e *

12.90%

Micro-

Small Ent.

22.96%

Others

27.36%

* However, this works out to 16.85% of the ANBC of 30.06.2015.

52.1%50.7% 52.8%49.3% 47.2% 47.9%

0%

25%

50%

Jun '15 Mar '16 Jun '16

Retail Advances Corporate Advances

Retail & Corporate Advances (%)

2,5672,6032,585 2,5642,820

7.67%7.67%

10.18%

8.44% 8.29%

0

1,000

2,000

3,000

M ar '14 M ar '15 Jun '15 M ar '16 Jun '16

1.0%

6.0%

11.0%

Amount %

*

18

Advances

Priority Sector Advances (` crs)

12,99614,345

14,284

16,15016,028

46.91% 46.82% 46.16% 47.57% 47.89%

0

4,000

8,000

12,000

16,000

Mar '14 Mar '15 Jun '15 Mar '16 Jun '16

0%

20%

40%

Amount %

*

Agriculture Advances (` crs)

4,790 5,146

5,5605,837

5,640

17.29%16.79%

17.97%17.19% 16.85%

0

1,000

2,000

3,000

4,000

5,000

6,000

M ar '14 M ar '15 Jun '15 M ar '16 Jun '16

9.0%

12.0%

15.0%

18.0%

Amount %

*

Advances to Weaker Section (` crs)

* Base figure for the calculation of % is ANBC as on March 31st of previous year.

67.9%67.2%67.0%75.9%

49.6%63.1%

103.0%118.2%

-43.3%-50%

0%

50%

100%

Jun '15 Mar '16 Jun '16

CD Ratio Incremental CD Ratio [Annual] Incremental CD Ratio [Quarter]

Credit Deposit ratio (%)

CD Ratio & Yield on Advances

11.98% 11.55% 10.98%

4.31% 4.04% 4.03%

0%

5%

10%

15%

Jun '15 Mar '16 Jun '16

Yield on advances Interest spread

Yield on Advances & Interest Spread (%)

19

20

NPAs

Gross NPAs (` crs)

10341180

1389

3.26% 3.44%3.92%

0

400

800

1,200

Jun '15 Mar '16 Jun '16

0%

1%

2%

3%

4%

5%

6%

Gro s s NP A Gro s s NP A %

Net NPAs (` crs)

6 3 9

7 9 5

911

2 .0 5 %2 .3 5 %

2 .6 1%

0

300

600

900

Jun '15 M ar '16 Jun '16

0 .0%

0 .5%

1.0%

1.5%

2.0%

2.5%

3.0%

Net NP A Net NP A %

265

1125

337

175

889

128

0

250

500

750

1000

Jun '15 Mar '16 Jun '16

Fresh Accretions to NPA Stock Recovery / Upgradation

Fresh accretions and recoveries (` crs)

(3 months) (3 months)(12 months)

Restructured Advances(` crs)

SectorRestructured

Adv.Of which,

NPA

Large Industry 797.33 135.60

Infrastructure 627.49 62.99

MSME [excl. Infrastructure] 115.25 17.57

Real Estate [including CRE] 89.99 1.49

Others 76.55 32.69

Agriculture 43.66 11.14

Education [Individual+Institution]

6.81 0.05

Wholesale/Retail Trade [excl. services]

2.16 0.00

Grand Total 1,759.24 261.54

Sectorwise Restructured Adv. as of Jun‟16:

Restructured loans & related accounts

21

182261 262

Of which, NPA

1,1311,183

1,861

628625

342

0

500

1,000

1,500

2,000

Jun '15 Mar '16 Jun '16

Restructured loans Related a/cs

2,203

1,7591,808

22

Investments

Investments [excl. RIDF] (` crs)

15,257 16,257 16,445

0

5,000

10,000

15,000

20,000

Jun '15 Mar '16 Jun '16

Shares

0.57%

SLR

69.38%

Debentures,

Bonds, CD,

MF

30.05%

Yield on Investments (excl. RIDF & MF) (%)

7.61% 7.59% 7.55%

0%

2%

4%

6%

8%

J un '15 Mar '16 J un'16

HFT

0.60%

AFS

35.49%

HTM

63.90%

AFS HFT HTM TOTAL

2.32 0.07 5.25 4.20

Duration

23

Share holders‟ value

Dividend (%)

162.00179.84

195.83

75

125

175

M ar '14 M ar '15 M ar '16

Earning Per Share (`)

23.2022.04

25.80

0

5

10

15

20

25

Jun '15 * Mar '16 Jun '16 *

Book value (`)

40%50% 50%

0%

10%

20%

30%

40%

50%

60%

Mar '14 Mar '15 Mar '16

Indian

Public

60.21%

Banks, FIs,

MF,

Insurance

Cos

9.82%

Foreign

Portfolio

Investors

19.62%Others

10.35%

Share holding pattern (Jun 2016)

* annualised

Leveraging on Technology

50.41%

44.49%42.26%

51.60%

20%

40%

60%

Mar '14 Mar '15 Mar '16 Jun '16

Migration to Digital Channel

[share of ADC transactions to total CBS transactions]

25

Business Strategy

KBL – VISION 2020

26

KBL – VISION 2020 document is unveiled and Bank has adopted a Vision

Statement, “To be a Progressive, Prosperous and well Governed Bank”.

Bank‟s total business turnover is projected to increase in a progressive manner to

touch ` 1,80,000 crore by March 2020, with deposits of ` 1,00,000 crore & advances

of ` 80,000 crore.

CASA is projected to constitute 27.40% of total deposits by March 2020.

Service outlets are projected to touch 3,500 [1,000 Branches + 2,500 ATMs] by

March 2020. E-lobbies / Mini e-lobbies to touch 250.

Digital Banking initiative to be taken forward by increasing the digital touch

points.

Bank aims to become a Preferred Banker to atleast 1% of India‟s population by

March 2020.

Credit quality initiatives, Risk management practices, Compliance culture &

Marketing initiatives to be further strengthened.

Priorities Strategy Product support

Increasing the share of CASA deposits

• Introduction of new SB & Currentaccount schemes tailored to suit thevarious market segments and periodicaloverhauling of the schemes with necessarysophistication / upgradation.

•Introduced Group Personal Accidentinsurance scheme to SB a/c holders.

• Increasing the penetration level ofalternate delivery channels such as ATMs,Internet banking and mobile bankingfacilities, POS etc.

• Pushing the use of electronic paymentfacilities like Real Time Gross Settlement(RTGS) and NEFT.

• Effective marketing through a focusedmarketing vertical.

• Holding CASA campaigns to reach outto new clients.

Salaried Persons

KBL - Salary Privilege

Students

KBL – Tarun

KBL – Kishore

Women

KBL –Vanitha

HNIs

KBL – SB Money Sapphire

KBL – SB Money Platinum

KBL – SB Money Ruby

SB – Suraksha for all SB a/c holders

Businessmen/Corporates

KBL Current Accounts

General

Money Pearl

Money Ruby

Money Diamond

Money Platinum

Money Diamond Plus

Business Strategy

27

Priorities Strategy Product support

Credit in

Centre Stage

Augmenting the credit disbursal throughspecially identified Focused AttentionBranches (FAB).

Thrust on Micro, Manufacturing andService sector under MSME lending andintroduction of new loan products forMSME.

Modification in organizational set up foreffective credit dispensation andmonitoring. Formed CrMD [CreditMonitoring Dept.] for exclusive monitoringof loans.

Thrust on maintaining quality of creditand effective credit monitoring throughcreation of Regular Asset Monitoring Cell(RAM Cell) and Stressed Asset MonitoringCell (SAM Cell).

Tackling Non Performing Assets throughearly and effective recovery action.

More thrust for Financial Inclusionagenda.

Housing & Car loan campaign has startedto have focused attention.

Business Strategy

28

Agri Sector

KBL- Instant

Agri Credit

KBL - Agri Gold

KBL - Kissan

Credit Card

KBL - Krishik

Sarathi

KBL – Krishik

Godham

KBL – Kisan Mitra

MSME Sector

KBL- MSME (Traders, Professionals, Transport Operators etc)

KBL – MSE

Support

Vyaapar Mithra

Housing

KBL- Apna Ghar

KBL – Home

Comfort

KBL - Ghar

Niveshan

KBL-Apna Ghar

Elite

KBL - Mortgage

KBL - Lease N Cash

KBL – Home TopUp

Consumption

KBL- Car Loan

KBL- Salaried

Persons

KBL- Insta Cash

KBL - Easy Ride

KBL-New Vahana

Mitra

Students KBL- Vidyanidhi

Women KBL- Mahila Udyog

Priorities Strategy Product support

Augmenting

Fee Income

Leveraging the Clientele base to enhance the“Other Income” by Cross Selling / upselling ofother products such as insurance & mutual fundproducts, lockers, gift cards, travel cards, etc.

Effective utilisation of „customersegmentation‟ tool – CLIVE tool & CAFÉ toolprovided by KPMG.

Concentrating more on acquirer business inATM channel.

Appropriate counselling on “FinancialPlanning” relevant for various stages of one‟slife/life style.

Life Insurance products

General Insurance products

Health Insurance

Mutual Fund products

Demat Services

Online Trading

POS Network

Gift Card

Travel Card

ASBA facility

Customer Relationship Management

Retention / Acquisition of customerthrough constant improvement in theservices rendered.

Speedy redressal of customercomplaints & grievances.

Special attention & support to seniorcitizens and differently enabledcustomers.

ATM facilities

Internet Banking facilities

Mobile Banking

e-Lobby facility

Moneyplant Visa Intl. Debit Cards

E - Commerce Online payment through Debit Card

M–Commerce Payment thro Mobile

Missed Call Banking facility

Mobile Apps

IVR facility to support customers

Online account opening

A dedicated Customer Service & Grievance Redressal Cell at HO

Online Grievance Redressal Mechanism

Business Strategy

29

Financial Inclusion Initiative

30

Bank is providing banking services to rural unbanked areas through 214 Gram Panchayats, consisting of 1,039

villages, of which, 102 are being covered by branches and rest are being covered by Business Correspondents.

Bank has a total of 37 USBs as at June 2016.

Bank has sponsored 5 Financial Literacy & Credit Counseling [FLCC] Centers.

Bank is one of the Trustees of Karnataka Farmers‟ Resource Centre, which serves as a Resource Centre for

providing training, counseling & consultancy services to farmers.

Bank is participating in the Govt. of Karnataka EBT Pilot project for NREGA / SSP beneficiaries.

Bank is participating in DBT programme of Govt. of India.

Bank is also participating in Modified DBTL for both Aadhaar based as well as Non-Aadhaar based (LPG ID)

across the country.

Bank has tied up with M/s BASIX Sub-k iTransactions Ltd. and M/s Integra Micro Systems (P) Ltd. for providing

end-to-end Business Correspondent Services in the 121 Gram Panchayat covering 561 villages in the states of

Karnataka and Chattisgarh.

Bank has introduced Basic Savings Bank Deposit Account [BSBD] & SB-Small Account with simplified KYC

requirement for hassle free opening of account.

Bank has also introduced the revised General Credit Card scheme which enables customers in rural & semi urban

area to avail hassle free credit for entrepreneurs in rural areas.

Bank has implemented Pradhan Mantri Jan-Dhan Yojana [PMJDY] and has opened 17,38,746 accounts during the

period from 15.08.2014 to 30.06.2016.

All Branches of the Bank are registered as service provider for Atal Pension Yojana and branches are opening

accounts of all eligible customers since August 2015.

MSME Initiative

31

Additional 50 branches identified as MSME branches and focused attention through all 210

specialized MSME branches to ensure hassle free flow of credit to the sector.

Holding MSME cluster meets at various centres in association with stakeholders like DIC,

ASSOCHAM, DSIA, etc.

Simplified systems & procedures, attractive rates of interest & collateral free loans upto

` 10 lakh.

Bank is extending differential rate of interest to MSE loans covered under CGTMSE.

Bank is not charging Processing Charges for loans to MSEs, upto ` 5 lakh limit.

Bank has entered into a MOU with Reliance Capital Ltd. for financing of MSMEs through co-

financing arrangement.

Bank has entered into a MOU with Credit Analysis & Research Ltd (CARE), for providing

Credit Rating Services & Due Diligence Services to the MSME clients of the Bank.

Bank has entered into a MOU with M/s Ashok Leyland, Tata Motors, BEML, TVS Motors for

purchase of vehicles by Micro & Small Entrepreneurs.

Bank has launched Online Loan Application Submission for MSME customers on Bank‟s

website under the MSME portal.

Bank is augmenting credit under Prime Ministers Mudra Yojana and Stand Up India schemes.

Other recent initiatives / developments

32

“Missed Call Banking Solution” since introduced for account balance enquiry & mini

statement.

“KBL-ApnaApp” & “KBL-mPassBook” – 2 new mobile applications launched, thereby

enabling customers to carry on a host of banking activities through their mobile phone.

Launched Sovereign Gold Bond scheme.

Introduced online account opening.

Launched KBL-Suraksha Insurance scheme for SB a/c holders.

HRMS project is under implementation.

33

Annexure

34

Deposits & Advances

` crs Jun-15 Mar-16 Jun-16

Total Deposits 46,767 50,488 51,501

CASA Deposits 11,693 13,261 13,504

Retail Deposits 34,911 37,073 37,841

Purchase liability, CD, IBD 163 154 156

Total Advances 31,352 33,902 34,946

Priority Sector Advances 14,284 16,150 16,028

Agri Advances 5,560 5,837 5,640

MSE Advances 6,588 8,037 8,131

Advances to Weaker Section 2,564 2,603 2,567

35

Income & Expenditure

` crs Mar-16[12 months]

Jun-15[3 months]

Jun-16[3 months]

Interest Income 4,992 1,229 1,261

Interest Expense 3,689 898 896

Net Interest Income 1,303 331 365

Fee Income 480 109 132

Treasury Income 62 10 42

Non-Interest Income 543 119 174

Total Income (Net of Interest Expense) 1,846 450 539

Operating Expenses 991 211 277

Operating Profit 855 239 262

Provision for loan losses in Adv. / losses in Invts. / Taxes / other

440 130 140

Net Profit 415 109 122

36

` crsMar-16

[12 months]

Jun-15[3 months]

Jun-16[3 months]

Interest Income

Interest Income 4,992 1,229 1,261

Interest on Advances 3,700 928 928

Interest on Investments 1,190 278 313

Other interest 102 2 20

Yield on Advances 11.55% 11.98% 10.98%

Adjusted yield on Invts. 7.76 7.38% 8.41%

Interest Expense

Interest Expense 3,689 898 896

Interest on Deposits 3,588 872 874

Other interest 101 26 22

Cost of Deposits 7.51% 7.67% 6.95%

Net Interest Income

Net Interest Income 1,303 331 365

Interest Spread in Lending 4.04% 4.31% 4.03%

Net Interest Margin on average assets 2.40% 2.55% 2.55%

Interest Income & Interest Expenditure

37

Capital Adequacy under BASEL III

` crs Jun-15 Mar-16 Jun-16

Total Risk Weighted Assets 32,786 34,787 35,797

Total Capital Fund 3,958 4,185 4,168

Total Tier I Capital 3,369 3,675 3,675

Paid up Equity Capital 188 188 188

Reserves under Tier I Cap. 3,181 3,487 3,487

Total Tier II Capital 588 510 493

Surplus Provisions & Reserves 258 250 257

Subordinated Debt Fund 331 260 236

Total CRAR 12.07% 12.03% 11.64%

CRAR Common Equity Tier I Capital 10.28% 10.56% 10.27%

CRAR Tier I Capital 10.28% 10.56% 10.27%

CRAR Tier II Capital 1.79% 1.47% 1.38%

Corporate Social Responsibility

Donation of school bus to PoornaprajnaKannada Medium Higher PrimarySchool, Admar.

Sponsorship of solar light system to ahousehold in Udupi, under a projecttitled “Student Solar Light Scholarship”.

Outlook for 2016 -17

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Business Turnover of ` 96,000 crore.

Opening of 40 new Branches to take the total no. of Branches to 765.

Introduction of 225 new ATMs to take total no. of ATMs to 1,500 and e-Lobbies / mini

e-Lobbies to 100.

Launching of Platinum debit card, Co-branded Credit card, Student combo card, Near

Field Communication Card & Mobile Virtual Card, etc.

Replacing GPRS mobile banking technology with App based solution suited for

smart phones.

Mobile wallet.

IMPS through various delivery channels like Branch, ATM and Internet Banking.

Financial Inclusion Gateway, which would facilitate bouquet of services.

NPCI's Unified Payment Interface (UPI), facilitating Interoperability, Push - Pull

Payments and fund transfer through virtual address.

WE EXPRESS OUR HEARTFELT GRATITUDE TO ALL

OUR STAKE HOLDERS FOR THEIR TRUST &

SUPPORT AND SOLICIT THEIR CONTINUED

PATRONAGE, AS WE CONTINUE OUR JOURNEY

WITH RENEWED DEDICATION & COMMITMENT.

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Board of Directors

D Harshendra Kumar Shri Kshethra Dharmastala,Dakshina Kannada

Dr. H Rama Mohan Kundapura Medical Practitioner

S V Manjunath Chikmagalur Planter

Ananthakrishna

Non Executive Chairman

P Jayarama Bhat

Managing Director & CEO

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Ashok Haranahalli Bengaluru Advocate

Mrs Usha Ganesh, IAS

Bengaluru Former Member of Karnataka Administrative Tribunal

Rammohan Rao Belle Bengaluru Former MD & CEO, SBI Gen. Insu. Co. Ltd

B A PrabhakarBengaluru Former Chairman & MD of Andhra Bank

U R Bhat Mumbai Investment Adviser & Columnist

Keshav Krishnarao Desai Hubballi Businessman

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